Macarthur Minerals - Dr Dean Carter, Projects General Manager (centre)
Dr Dean Carter, Projects General Manager (centre)
Source: Macarthur Minerals
  • Macarthur Minerals (MMS) is looking to raise approximately C$5.88 million to fund ongoing work at its Lake Giles Project in Western Australia
  • The company intends to issue around 11.3 million units at a price of approximately $0.52 ( A$0.55) each, comprised of one share and one option to acquire an additional share at a price of around $0.85 (A$0.90)
  • A standby equity facility agreement has also been signed with L1 Capital Global Opportunities Master Fund, which will provide a further $18.82 million (A$20 million) in financing
  • The company is currently approaching a new phase of negotiations to deliver a feasibility study for the Lake Giles Project
  • Macarthur Minerals (MMS) is currently up 10 per cent and is trading at $0.55 per share

Macarthur Minerals (MMS) is looking to raise approximately C$5.88 million to fund ongoing work at its Lake Giles Project in Western Australia.

Under the terms of the placement, which will be completed in two tranches and has already received firm commitments from sophisticated and institutional investors, the iron ore-focused company intends to issue 11,362,629 units at a price of $0.52 (A$0.55) each.

These units will consist of one new share in Macarthur Minerals and one option to acquire an additional share at a price of $0.85 (A$0.90), exercisable within a period of 24 months.

The price of the new shares represents a 7.08 per cent discount compared to the company’s 30-day volume weighted average price on the ASX as of October 7.

An initial tranche will consist of all the new shares and 5,137,371 options, while a second tranche is expected to close on November 2 and will consist of the remaining 6,225,258 options, pending shareholder approval.

The approval for the second tranche will be sought at Macarthur’s upcoming Annual General Meeting on October 30.

It’s anticipated that the majority of the proceeds will be used for working capital purposes while the company progresses the completion of a Feasibility Study for the Lake Giles Project, located in the prolific Yilgarn region.

Cameron McCall, President and Executive Chairman of Macarthur Minerals, said the level of interest in the placement is a strong endorsement for the company.

“With iron ore prices continuing to defy broader global impacts from the COVID-19 pandemic, investor demand in the placement demonstrates market confidence continues to build around Macarthur and its ability to deliver the Lake Giles Iron Project for shareholders,” he added.

In addition to the placement, Macarthur has also signed a standby equity agreement with L1 Capital Global Opportunities Master Fund, which will provide a further $18.82 million (A$20 million) in financing.

Over a 36-month period, the company will be able to issue shares to L1 Capital – at its own discretion and based on certain conditions – in exchange for additional funds.

“Bolstering the company’s balance sheet … places the company on a strong footing and positions Macarthur well as it moves through the next critical phases of project delivery and as it targets simultaneous completion of the main project financing strategy for the Lake Giles Iron Project with EAS Advisers,” Cameron concluded.

Macarthur Minerals (MMS) is currently up 10 per cent and is trading at $0.55 per share at 10:05am EDT.

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